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If you have debts building up from credit cards, overdrafts and other types of term loans, it’s likely that you are paying a fair amount of interest each month.
Some people find that taking out a debt consolidation loan works as a cost-effective way to combine all their existing debts into a single monthly payment, often at a lower interest rate.
We explain more about how debt consolidation loans work, their pros and cons and what to consider before you make an application.
A debt consolidation loan is a type of loan used to clear multiple existing debts through a single monthly payment. For example, some people take out this type of loan to manage debts for credit card borrowing, overdrafts and other small loans.
Depending on your current circumstances, consolidation loans may be able to offer a better rate of interest, which can make it easier to repay the outstanding debts.
There are two types of debt consolidation loan:
Before you submit an application for a debt consolidation loan it’s a good idea to weigh up the pros and cons to see if it suits your financial circumstances.
Pros
Ms Boothby
Monthly Reduction £732
Mr Farid
Monthly Reduction £622
Ms Nyoni
Monthly Reduction £738
Mr Simmonds
Monthly Reduction £629
Mr & Mrs Coombe
Monthly Reduction £636
Mr & Mrs Bowers
Monthly Reduction £543
Cons
Ms Boothby
£722
Monthly Reduction by consolidating with a loan
Here are few key questions worth asking before you apply for debt consolidation loan:
Before you apply for a secured debt consolidation loan it’s important to assess your finances to see what size loan you can afford. This will help you avoid accruing more debt, which could lead to more financial distress, affecting your credit score and potentially putting your home at risk.
You can use our debt consolidation calculator as a start point to see how much you could reduce your debts by. It won’t leave a footprint on your credit file, and it can’t affect your credit score, so you can use it as much as you need.
If the debt consolidation loan is not enough to pay off all your debts, you will still be managing more than one debt. As you are already struggling to keep up with the repayments on multiple debts, there is a chance that even with the debt consolidation loan in place that you continue to find it difficult to stay up to date.
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It is likely that if you extend the time it takes to repay the loan you could end up paying more in interest, even though the monthly repayment total will be lower. This is an important factor to consider, as this means the total amount you will be repaying will be higher.
Get in touch with your existing lenders and request a settlement figure for each one. This will tell you exactly how much you owe, including interest and fees. Add this together and it will tell you the total size of your debt which you can use to compare against any debt consolidation deal
We work with several specialist lenders who would be willing to consider a bridging loan as part of a debt consolidation package.
Lenders will want to establish the original reason for taking out the bridging loan and how you initially planned to settle it. If the loan has experienced or exceeded the planned term, they may ask you to provide more detail about why you were not able to keep to the original plan.
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Flexible Loan Uses – Borrow for commercial expansion, equipment upgrades, or financial restructuring.
Access funds upfront while keeping monthly payments low with an interest-only secured loan.
No Need to Remortgage: Keep your existing mortgage and secured terms .
We work with lenders that consider applications from individuals who are currently in a debt management plan
Secure a loan against non-traditional properties, including PRC, and steel-framed.
Access lenders who accept benefits like PIP, Carer’s Allowance, and Universal Credit.
Getting a quote won’t affect your credit score
We’re extremely proud to be rated ‘Excellent’ for our service standards. We’ve helped thousands of customers across the UK over the last 15 years to find the right finance for their needs – no matter how complicated the circumstances. And we look forward to helping you.
Finding the right finance doesn’t have to be complicated – so, we’ve made the process clear and simple. Whether you’re applying for a Secured Loan, Mortgage or Bridging Finance, we’ll compare the market for the best options that meet your criteria and provide you with a fast no-obligation quote.
The initial enquiry takes under 2 minutes to request an in-principle loan or mortgage quote.
We compare lenders to provide your best options in minutes with no affect to your credit score.
Happy with your quote – we make completing the process simple and easy for the lender to approve.
We’re here to help every step of the way and ensure you get your money quickly.
Dealing with growing debt can be extremely stressful, especially if you are struggling to find a long-term solution. Debt consolidation loans can be helpful – but only if time and care is taken to find a deal that fits your circumstances. That is what we specialise in at Willows, working with you from start to finish to match you with a suitable lender.
If you need more clarity on any of the questions and answers above or have something more specific in mind, get in touch with us today on 01656 766 158 to speak with one of our expert advisors.
If you have a question – we’d be happy to talk to you – simply call us…
(Mon-Fri 9am-8pm, Sat 10am-1pm)
Our Rating
At Willows Finance we ensure your personal information is kept secure and confidential.
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At Willows Finance Ltd, we appreciate that your privacy is extremely important to you. With this in mind, we have put in place a number of measures to ensure that any personal details we obtain from you as a result of visiting this website is processed and maintained in accordance with accepted principles of good information handling and also in accordance with the Data Protection Act 1988.
This statement provides you with details of the type of information we may hold about you, how we obtain and use information and how we protect your privacy.
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Authorised and regulated by the Financial Conduct Authority
Firm Reference Number: 670052
Company Number: 6678545 (Registered in England and Wales)
This document outlines the services we provide. If you need clarification, please contact us at 01656 766158.
We offer first and second charge regulated mortgage contracts for business or personal use.
Other finance options may include:
Regulatory Status:
We offer an advised mortgage broking service and provide enough information for you to make an informed decision.
We are not independent financial advisers. Free debt advice is available from the Money Advice Service.
You can view our privacy policy at: https://willowsfinance.co.uk/privacy-cookie-policy/.
Lenders may also have their own privacy policies which will be provided to you.
We charge a broker fee upon loan completion. The average fee is approximately 5%, depending on your situation.
Fee details:
No refund is offered after completion. You may pay upfront or add the fee to your mortgage. Fees and commission will be detailed in your ESIS and Mortgage Agreement.
You will receive a Mortgage Agreement and an ESIS document detailing:
You may cancel your application anytime before completion without any charge. Mortgages cannot be cancelled after completion.
Missing payments can lead to charges, repossession, and negative impacts on your credit rating.
Consolidating debt may result in higher long-term interest. Securing debt against your home increases risk.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loan secured on it.
If you wish to complain, contact us at:
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Tel: 01656 766158
You may be able to refer your complaint to the Financial Ombudsman Service.
We are covered by the FSCS. You may be eligible for compensation of up to £85,000 per person per firm for mortgage advice and arranging.
More info: www.fscs.org.uk
After processing your application, you’ll receive a Mortgage Agreement and have a 7-day reflection period.
Contact us during this period with any questions. To proceed, sign and return the agreement.
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